Exhibit
10.2


Severance
Agreement


As of January
1, 2010


Mitchell
Zuckerman

c/o Sotheby’s

1334 York Avenue

New York, New York 10021


Dear Mitchell:


          This
letter agreement (the “Agreement”) sets forth our understanding with respect to
your rights and obligations in the event of the termination of your employment
with Sotheby’s (together with all of its subsidiaries and related entities,
“Sotheby’s” or the “Company”). This Agreement is being provided to you because
you are a key employee at the Company and perform highly specialized and unique
duties for the Company. Consequently, Sotheby’s is offering you the following
terms and financial enhancements to ensure your continued loyalty to the
Company, and so that you will focus fully and exclusively on your job duties at
Sotheby’s. Defined terms used herein are used with the meanings given to them
in Exhibit A.


	
  

 	
  

 	
  

 	
  

 	
  

 
	
 (1)

 	
 Severance
 Arrangements.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 a)

 	
 If at any
 time from the date hereof through three years (the “Applicable Period”), your
 employment by the Company is terminated by you for Good Reason or by the
 Company without Cause, the Company shall pay or provide you with the
 following:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (i)

 	
 Within
 fifteen (15) days of your termination date, payment of the sum of (x) any
 unpaid base salary through the date of termination and (y) any unpaid and
 approved cash incentive compensensation amount for the prior calendar year
 prior to your date of termination; and, within sixty (60) days of your
 termination date, reimbursement for any approved unreimbursed expenses
 incurred through the date of termination (“Accrued Obligations”); 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (ii)

 	
 Three times
 your annual base salary at the time of your termination (not to include the
 salary reduction agreed to in 2009) plus the total amount of the cash incentive
 compensation actually paid to you for the last three years prior to your
 termination date which amount shall be in lieu of any other payments or
 benefits to which you might otherwise be entitled, including but not limited
 to, any 

 













	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 payments or
 benefits for which you could be eligible under the Sotheby’s, Inc. Severance
 Plan, any amended version of such Plan, or successor plan (the “Plan”). This
 amount shall be paid within seventy-four (74) days of termination of
 employment, provided all conditions for receipt of this payment have been
 met; and

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (iii)

 	
 Eighteen
 (18) months of Company paid continued coverage under Sotheby’s group medical
 and dental insurance plans pursuant to the Consolidated Omnibus Budget
 Reconciliation Act of 1985, as amended (“COBRA”) in accordance with the terms
 of the applicable medical and dental plans beginning when your coverage would
 terminate as an employee; provided that you timely and properly elect COBRA
 continuation coverage.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 b)

 	
 If during
 the Applicable Period, your employment is terminated by the Company for
 Cause, this Agreement shall terminate without further obligation to you,
 except that the Company shall pay you any Accrued Obligations as defined
 above and shall continue to be obligated to you with respect to vested
 benefits in accordance with the terms of the applicable plans. Other than
 Accrued Obligations, you will not be eligible for any incentive compensation
 for any period prior to or after the date of termination of your employment.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 c)

 	
 If during
 the Applicable Period, your employment is terminated by the Company because
 of your permanent disability or death, this Agreement shall terminate without
 further obligation to you, except that the Company shall pay you or your
 estate any Accrued Obligations as defined above and shall continue to be
 obligated to you or your estate with respect to vested benefits in accordance
 with the terms of the applicable plans. Other than Accrued Obligations, you
 will not be eligible for any incentive compensation for any period prior to
 or after the date of termination of your employment.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 d)

 	
 During the
 term of this Agreement, you hereby agree to waive irrevocably any rights or
 benefits under the Plan in its current form, as it may be amended from time
 to time, or under a successor plan. Upon expiration of this Agreement, if you
 and the Company do not enter into a mutually agreed new severance agreement,
 you will become eligible for benefits under the terms of the Company’s
 severance plan in effect at that time.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 e)

 	
 Any payments
 payable pursuant to this Paragraph 1 beyond Accrued Obligations shall only be
 payable if you deliver to the Company a release, in a form acceptable to the
 Company, as similarly required under the Plan, of any and all your claims
 (except with regard to claims for payments or benefits specifically payable
 or providable hereunder which are not yet paid as of the effective date of
 the release, claims for vested accrued benefits, claims under COBRA, or
 claims relating to 

 













	
  

 	
  

 	
  

 
	
  

 	
  

 	
 any rights
 of indemnification under the Company’s certificate of incorporation or
 by-laws or claims under any directors and officers liability insurance
 policy) occurring up to the release date with regard to the Company and its
 respective past or present officers, directors and employees.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 (2)

 	
 Certain
 Agreements. In consideration of the undertakings by
 the Company in Paragraph (1), you agree to be bound by the covenants and
 agreements set forth in Exhibit B hereto.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 (3)

 	
 Miscellaneous.
 You may not assign your rights or delegate your obligations under this
 Agreement. Sotheby’s shall be entitled to withhold from any payments or
 deemed payments under this Agreement any amount of withholding required by
 law. This Agreement constitutes the entire agreement between you and
 Sotheby’s concerning the subject matter of your employment and supersedes any
 prior employment, severance, or notice and non-compete agreement between the
 parties. Any waiver or amendment of any provision of this Agreement must be
 in writing and signed by both parties.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 (4)

 	
 Legal and
 Equitable Remedies. Sotheby’s shall be entitled to
 enjoin a violation by you of any provision hereof, including, but not limited
 to, the obligations in Exhibit B. Moreover, the parties hereto acknowledge
 that the damages suffered by Sotheby’s as a result of any violation of this
 Agreement may be difficult to ascertain. Accordingly, the parties agree that
 in the event of a breach of this Agreement by you, Sotheby’s shall be
 entitled to specific enforcement by injunctive relief of your obligations to
 Sotheby’s. The remedies referred to above shall not be deemed to be exclusive
 of any other remedies available to Sotheby’s, including to enforce the
 performance or observation of the covenants and agreements contained in this
 Agreement.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 (5)

 	
 Arbitration.
 Any dispute, controversy or claim arising out of or relating to this
 agreement, or breach thereof (other than an action or proceeding for an
 injunction or other equitable relief pursuant to Paragraph 4 hereof), shall
 be settled by arbitration in New York City in accordance with the National
 Rules for the Resolution of Employment Disputes of the American Arbitration
 Association by a single arbitrator. Any rights, defenses, or remedies available
 in a court of competent jurisdiction shall also be available to the parties
 in arbitration. The arbitrator’s award shall be final and binding upon both
 parties, and judgment upon the award may be entered in any court of competent
 jurisdiction in any state of the United States or country or application may
 be made to such court for a judicial acceptance of the award and such
 enforcement as the law of such jurisdiction may require or allow.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 (6)

 	
 Severability.
 If at any time there is a judicial determination by any court of competent
 jurisdiction that any provision of this Agreement is unenforceable against
 you, the other provisions of this Agreement shall not be rendered void but
 shall be deemed amended to apply as to such maximum extent as the court may
 judicially determine or indicate to be enforceable under New York law.

 













	
  

 	
  

 	
  

 	
  

 	
  

 
	
 (7)

 	
 Choice of
 Law/Choice of Forum. This Agreement shall be
 governed by, construed and enforced in accordance with the laws of the State
 of New York irrespective of the principles of conflicts of law, and you
 consent to the jurisdiction of the state and federal courts situated in New
 York City for the purpose of adjudicating any dispute relating to this
 Agreement. 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 (8)

 	
 Binding on
 Successor Company. This Agreement shall remain in
 effect and be binding upon any successor or assign of Sotheby’s including any
 entity that (whether directly or indirectly, by purchase, merger,
 reorganization, consolidation, acquisition of property or stock, liquidation
 or otherwise) is the survivor of the Company or that acquires the Company
 and/or substantially all the assets of the Company, and such successor entity
 shall be deemed the “Company” for purposes of this Agreement. 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 (9)

 	
 Notices.
 For the purpose of this Agreement, notices and all other communications
 provided for in this Agreement shall be in writing and shall be delivered
 personally or mailed by United States certified or registered mail, return
 receipt requested, postage prepaid, addressed to you at the address set forth
 on the initial page of this Agreement and to the Company at Sotheby’s, 1334
 York Avenue, New York, New York 10021, Attention: General Counsel, or to such
 other address as either party may have furnished to the other in writing in
 accordance herewith. Any such notice shall be deemed given when so delivered
 personally, or, if mailed, five (5) days after the date of deposit in the
 United States mail, except that notice of change of address shall be
 effective only upon receipt.

 



Please review
this Agreement carefully and, if it correctly states our agreement, sign and
return to me the enclosed copy.


	
  

 	
  

 	
  

 
	
  

 	
 Very truly
 yours,

 
	
  

 	
  

 	
  

 
	
  

 	
 SOTHEBY’S 

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Susan
 Alexander

 
	
  

 	
  

 	

 


 
	
  

 	
  

 	
 Susan
 Alexander

 
	
  

 	
  

 	
 Executive
 Vice President and

 
	
  

 	
  

 	
 Worldwide
 Head of Human Resources 

 



Read, accepted
and agreed to this

18th day of December, 2009


	
  

 
	
 /s/Mitchell
 Zuckerman

 
	

 


 
	
 Mitchell
 Zuckerman

 










EXHIBIT A


DEFINITIONS


	
  

 	
  

 	
  

 
	
 “Cause”
 shall mean and be limited to: 

 
	
  

 	
  

 	
  

 
	
  

 	
 a)

 	
 conviction
 of a felony crime;

 
	
  

 	
  

 	
  

 
	
  

 	
 b)

 	
 fraud,
 willful malfeasance, gross negligence, or any other act in connection with
 performance of your duties which is materially injurious to the Company; or

 
	
  

 	
  

 	
  

 
	
  

 	
 c)

 	
 any material
 breach of this Agreement by you.

 
	
  

 	
  

 	
  

 
	
 “Good
 Reason” shall mean the occurrence of any of the following events:

 
	
  

 	
  

 	
  

 
	
  

 	
 a)

 	
 any material
 breach of this Agreement by the Company; 

 
	
  

 	
  

 	
  

 
	
  

 	
 b)

 	
 your being
 required to relocate to a principal place of business more than fifty (50)
 miles outside New York, New York without your express consent;

 
	
  

 	
  

 	
  

 
	
  

 	
 c)

 	
 any action
 by the Company that results in a material diminution in your position, base
 salary, and/or incentive targets (unless the percentage decrease in the
 target(s) is consistent with those of other similar level corporate officers)
 without your express consent (except in connection with the termination of
 your employment for Cause or as a result of your death or Permanent Disability
 or temporarily as a result of your illness or other absence); and

 
	
  

 	
  

 	
  

 
	
  

 	
 d)

 	
 failure of
 the Company to maintain directors and officers liability insurance for your
 benefit on a basis no less favorable than the basis on which it generally
 maintains such insurance for the benefit of other senior executives of the
 Company.

 
	
  

 	
  

 	
  

 
	
  

 	
 provided,
 however, that you shall provide the Company thirty (30) days’ prior written
 notice from the date one of the above-referenced events occurs constitiuting
 Good Reason that you are terminating your employment for Good Reason, and the
 Company shall have thirty (30) days following the receipt of that wtitten
 notice to correct such circumstances.

 
	
  

 	
  

 	
  

 
	
 “Permanent
 Disability” shall mean, and be limited to, any physical or mental illness,
 disability or impairment that has prevented you from continuing the
 performance of the essential functions of your position with reasonable
 accommodation for a period in excess of six (6) consecutive months.

 









EXHIBIT B


CERTAIN AGREEMENTS


Notice, Non-Compete and Non-Solicitation Agreement.


You agree to
give the Company not less than six months’ prior written notice to terminating
your employment without Good Reason. 


Because you
have specialized, unique confidential knowledge vital to the Company and the
special nature of the services that you provide to the Company, you agree that
during your employment and for twelve (12) months following your date of
termination (“the Restricted Period”), you will not, without the consent of the
Company, directly or indirectly: consult for, become employed by, provide
services for, or solicit or accept any funds, loans or other consideration from


	
  

 	
  

 	
  

 
	
  

 	
 a)

 	
 Christie’s,
 Bonhams, or Phillips de Pury & Company or any affiliate or successor of
 any of those entities anywhere in the world; or

 
	
  

 	
  

 	
  

 
	
  

 	
 b)

 	
 another
 entity engaged in conducting auctions, dealing in or making private sales of,
 collecting or advising with respect to any core collecting category in which
 the Company sells property within the last twelve (12) months in the United
 States, United Kingdom, Hong Kong, Switzerland or France. 

 
	
  

 
	
  In addition to the foregoing, during the
 Restricted Period, you agree that you will not, either alone or in concert
 with others, and will not cause another to, in any such case, directly or
 indirectly

 
	
  

 	
  

 	
  

 
	
  

 	
 a)

 	
 hire,
 recruit, solicit or induce any Sotheby’s employees to terminate their
 employment with Sotheby’s;

 
	
  

 	
  

 	
  

 
	
  

 	
 b)

 	
 solicit the
 business of, do business with, or seek to do business with, any client of the
 Company;

 
	
  

 	
  

 	
  

 
	
  

 	
 c)

 	
 encourage or
 assist any competitor of the Company to solicit or service any client of the
 Company; or

 
	
  

 	
  

 	
  

 
	
  

 	
 d)

 	
 otherwise
 induce any client of the Company to cease doing business with, or lessen its
 business with, the Company.

 



If at any time
there is a judicial determination by any court of competent jurisdiction that
the time period, geographical scope, or any other restriction contained in this
Agreement is unenforceable 





against you,
the provisions of this Agreement shall not be deemed void but shall be deemed amended
to apply as to such maximum time period, geographical scope and to such other
maximum extent as the court may judicially determine or indicate to be
enforceable. You understand and agree that, during the Restricted Period, you
are not prohibited from obtaining alternative employment subject to the
provisions above.


Confidentiality Agreement.


As a condition
to your continued employment by the Company and in consideration for this
Agreement, you reaffirm your agreement to be bound by the Company’s Confidentiality
Agreement, Compliance Policies, including but not limited to, its Auction
Rules, Code of Business Conduct and Ethics, Conflicts of Interest Policy, and
Human Resources polices.